Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every dayin the early am at GEI News (membership not required for access to "The Early Bird".).
Clinton VP candidates grab the spotlight (The Hill) Names mentioned: Rep XavierBecerra (Calif.); Sen. Cory Booker (NJ); Sen Sherrod Brown (OH); and Labor Secretary Tom Perez. Other possible candidates were not included - the four mentioned appeared on TV shows Sunday.
How American Politics Went Insane (The Atlantic) The political parties no longer have either intelligible boundaries or enforceable norms, and, as a result, renegade political behavior pays - witness Trump and Sanders.
Like many disorders, chaos syndrome is self-reinforcing. It causes governmental dysfunction, which fuels public anger, which incites political disruption, which causes yet more governmental dysfunction. Reversing the spiral will require understanding it. Consider, then, the etiology of a political disease: the immune system that defended the body politic for two centuries; the gradual dismantling of that immune system; the emergence of pathogens capable of exploiting the new vulnerability; the symptoms of the disorder; and, finally, its prognosis and treatment.
Econintersect: To exemplify the self-feeding chaos effect, we facetiously imagine a candidate for national office, who makes the following statement and by it gains great public support:
"The government van't do anything right. Elect me and I'll prove it."
Angela Merkel 'to oust Jean-Claude Juncker' as Europe splits deepen over Brexit response (The Telegraph) Brexit could cost the president of the European commission, Belgian Jean-ClaudeJuncker, his job. Angela Merkel could move to oust Europe’s federalist chief 'within the next year', a Germany government minister has said, in a sign of deepening European divisions over how to respond to Britain’s Brexit vote. The German chancellor’s frustration with the European Commission chief came as Europe split over whether to use the Brexit negotiations as a trigger to deepen European integration or take a more pragmatic approach to Britain as it heads for the exit door.
A Radical Proposal After Brexit: End the European Union and Begin Destructive Creation (Evonomics) Brexit is only one of many signs of how the political landscape within Europe has been tilting. A disintegrative tendency has been gathering steam over the last 5-10 years, well before UK Prime Minister David Cameron had rashly set the referendum on whether UK should leave the EU in motion. The author presents a "proposal ... quite radical" which is a condemnation of neoliberalism as a manifestation of opposition to coordination and a denial of "cultural evolution". He proposes the best course is Shumpeterian:
Rather than trying to fight the disintegrative trend, we should allow it to run its course, destroying the EU as it is now.
But we need a European Union. Thus, what I hope will happen is another integrative project within Europe, one that will learn from the mistakes of the last one.
In other words, the EU is dead; long live a new and better EU.
The overall trend over the last 10,000 years has been for humans evolving to cooperate in ever larger societies—from living in farming villages of a few hundred people to nation-states of today and even supra-national formations like the EU. But cooperation is fragile. We know from studying history that cooperation tends to go up and down in cycles. Currently, and according to all the indicators, both the United States and the European Union are in a downward, disintegrative, phase of the cooperation cycle.
Greek economic migrants increasing, while joblessness soars (The Guardian) Greece is facing a ‘brain drain’ as 427,000 economic migrants, many high-skilled, leave the country in light of debt crisis. This is the country's biggest brain drain in modern history. Such a loss makes the "prospect of economic recovery even more bleak".
ISIS Attack Kills More Than 140 In Baghdad (Outside the Beltway) As Iraqis gathered late on Saturday night in central Baghdad to eat, shop and just be together to celebrate one of the last evenings of the Muslim holy month of Ramadan, a huge bomb exploded and killed at least 143 people, the third mass slaughter of civilians in three countries carried out by the Islamic State in recent days. As organized ISIS loses ground in Iraq and Syria, guerrilla ISIS strikes back.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
The Sex Amendment (The New Yorker) This is the story of how equal rights for women has been resisted for a century and a half and how much progress realized was almost an afterthought.
Was There Ever a Time When so Few People Controlled so Much Wealth? (Evonomics) Oxfam’s latest report claims that income inequality has reached a new global extreme, exceeding even its predictions from the previous year. The figures behind this claim are striking – just 62 individuals now hold the same wealth as the bottom half of humanity, compared to 80 in 2014 and 388 in 2010. It appears not only has the financial crisis been weathered by the global elite, but that their fortunes have collectively improved. The author determines that there have been previous periods in human history with extreme wealth concentration, but all those were based on physical coercion and military power, what the author refers to as “primitive accumulation”. What is unique about the current situation is that is is based on financialization of the world economy. Econintersect: No used by the author we propose a new term derived from financialization: credit accumulation. The new weapon of world domination is control of debt as much as control of military weapons. We will repost this article in full at GEI in the near future. See also next article.
We all know something is deeply broken in our economy. It’s been eight years since the financial crisis. The Fed has pumped $4 trillion of money into the markets, but we are still in the longest, slowest recovery of the post‑war era.
I believe that the reason for that is that our system of market capitalism is broken. The capital markets and Wall Street are no longer serving business or the Main Street economy that you and I live in.
If you think about it, capitalism as defined by Adam Smith was a system by which the capital markets would take the deposits that you and I put in the bank, and invest it in real businesses that create real jobs and growth.
But only 15 percent of all the money flowing through financial institutions today ends up in businesses. The rest of it is staying within the closed loop of the market itself. It’s being traded.
The vast, unrecognized power of Monetary Sovereignty: Where do we go from here? (Rodger Malcolm Mitchell, Monetary Sovereignty) RMM contributes to GEI. Mitchell has a solution to the outsized dominance of financialization on the world economy discussed in the preceding two articles: Separate creation of money from the creation of credit. He suggests that countries with a sovereign currency should not use sovereign debt as the primary way of funding government expenditures - the money to fund infrastructure and public services (health, education and welfare) should simply be created as needed.
Energy Transitions Take Time(Josh Brown, Twitter) Very insightful history lesson. To understand in depth the course of transitions would require an analysis of the competitive costs for energy sources during each historical era. Renewables could be faster or slower than previous transitions based on the economics.
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